Tesla posts its first ever annual sales decline

New York
CNN
—

Tesla reported the first full-year sales decline in its history as a public company on Thursday as increased competition and slowing demand for electric cars hit results.

The company reported fourth-quarter sales of 495,570 vehicles, up 2% from what it sold a year earlier. But that left it far behind the 595,413 pure electric cars sold by Chinese rival BYD in the quarter. Tesla’s full-year sales of 1.8 million vehicles nonetheless boosted BYD’s annual EV total by 24,000 to retain its title as the world’s largest EV manufacturer.

But Tesla’s 2024 total sales fell 1% from the 2023 total, the first time the company has reported that kind of decline. Tesla at one point reported annual sales growth of nearly 50% per year, and its total sales in 2023 were up a solid 37% over 2022, so even a narrow drop represents a significant slowdown.

Tesla has faced increased competition not only from Chinese rivals such as BYD, but also from legacy global automakers such as General Motors, Ford, Volkswagen AG and Korean partners Hyundai and Kia. Although these legacy automakers only have a fraction of Tesla’s EV sales, since they mostly sell traditional gasoline-powered cars, they pose more competition.

Tesla has responded to declining demand by lowering car prices, both in China and the US. It has the advantage of being more profitable than its legacy automaker rivals, which are still losing money on their EV sales as they try to build sales volume and cut costs.

However, sales of electric cars in general continue to grow, both in the US and globally, albeit at a slower pace than previously.

Shares of Tesla ( TSLA ) fell more than 4% in early trading on the weak sales report. But they closed 2024 up 68% for the year. Almost all of that gain came after Election Day, when investors bet Tesla will benefit from policies under the incoming Trump administration, given the key support for the president-elect from CEO Elon Musk.